Iron-ore nears four-month low on prospects of rising supply, tepid demand
Iron-ore prices extended declines on Tuesday to hit a nearly four-month low, weighed down by prospects of rising shipments from major suppliers in the run-up to the end of the second quarter and seasonally sagging steel demand.
By 03:00 GMT, the most-traded iron-ore contract on China's Dalian Commodity Exchange (DCE) fell 0.74% to 737 yuan ($108.81) a ton, after touching its weakest since February 24 at 736 yuan earlier in the session.
By 02:50 GMT, the benchmark July iron-ore on the Singapore Exchange was down 0.45% at $97.8 a ton, its lowest since February 25. The contract has stayed well below a key psychological level of $100 for a fourth straight session.
Miners are expected to ramp up shipments this month to achieve their guidance targets.
That coincides with seasonally weakening demand, suggesting a potential pile-up in portside inventory that will keep prices of the key steelmaking ingredient under pressure, said analysts.
Also, the downbeat macroeconomic data, particularly retail sales, which fell for the first time in over three years, raised expectations of faltering steel consumption ahead, analysts at broker Maike Futures said in a note.
Moreover, ore prices are also under pressure owing to the collapse of cost support, as progress in peace talks between the US and Iran sent energy prices and freight rates down.
Rising freight rates and input costs due to the energy price spikes triggered by the Middle East conflict had underpinned iron ore price resilience even as demand was lacklustre.
Coking coal and coke, other steelmaking ingredients, extended falls on gloomy demand prospects, down 0.98% and 3.24%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were broadly weaker. Rebar shed 0.42%, hot-rolled coil dipped 0.45%, wire rod lost 0.3% and stainless steel slipped 1.26%.
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